This logic justifies any amount of fees. They can be excellent brokers and still not deserve $6000 (selling a $1M house) for maybe 40 hours of work as a very generous estimate.
It would be $60,000, not $6,000 but they don’t make $60K. They spit the commission, $30K and then there are other people (broker) that get paid out of that amount, call it $20K to the agent in that case, sometimes less if they gave their client a discount (again this happened all the time before the settlement, I know agents that offered .5% off for repeat clients or friends and family and that came wholly out of their cut, so call it $15K in that case).
Even at $60K there are things an agent can do to swing the value of a house that much or more. Maybe you, the seller, will do some/all of those things, maybe you won’t.
Agents are effectively on-call 24/7 (your agent wasn’t? Sorry, see above: not all agents are created equal) and they often work in the off-hours for every other profession (aka nights and weekends).
Here is the thing, /most/ people buying or selling a $1M+ houses are not nickel and dimming. I sure HN has an outsized group of people who disagree, cool, I’ve seen it first hand.
I find it ironic that on a technology forum people are so quick to jump to “agents aren’t worth it” with so many people think the same thing about software developers and/or their quotes for building software.
> I find it ironic that on a technology forum people are so quick to jump to “agents aren’t worth it” with so many people think the same thing about software developers and/or their quotes for building software.
This isn't exactly an honest comparison. The vast majority of software engineers do not make a percentage of the earnings of the product they're developing. If I work for a company making 150k/year, I don't suddenly start making 300k/year if the company sells my software for twice as much. Likewise, I can't charge twice as much for consulting just because the company I'm consulting for makes twice as much money.
An agent makes a commission based only on the value of the house, which incentivizes them to sell more expensive houses. When I purchased my house, I did most of the work (found the house, hired a home inspector, found my own mortgage, used my own lawyer) - the agent existed because it was basically required, and made 11k for roughly 15 hours of work. If I was wealthier, and could have afforded a more expensive house, they could have made 20k for 15 hours of work. In both cases, they did the exact same amount of work (minimal); why did they make more in the second scenario?
Now that I know how the system works, I will be avoiding agents if at all possible when I sell my current house and buy my next. They're about as useful as used car salesmen, but somehow have convinced the entire continent that the housing market will fall apart without them.
More typically in that price range: 5% of 1m = 50k. / 2 brokerages so 2.5% = 25k. * 80% to agent = 20k. - agent costs = You would cry at how little net most agents make.
You are not paying an agent hourly for the amount of time they work on your transaction, but for their knowledge and experience - which cost them significant amounts of money - to guide you through the transaction and not shoot yourself in the foot. There is a fine line to walk between getting rejected outright and a deal never happening, and overpaying. You also might be buying a lemon (and not just from the perspective of a home inspection - people *regularly* want to do things with properties and transactions that just won't fly. They need to hear that from somebody on their side before they wind up losing much more than a couple percent). An agent will help you avoid them. Add on top of that how agents can help avoid the many lawsuits there are when people feel slighted and/or are actually slighted in RE transactions, and real estate agents are a decent value.
Agents are functionally like mini-attorneys + advisors for real estate. You wouldn't walk into a court room without a lawyer, and it is not a whole lot smarter to enter into a real estate transaction without an agent.
